PropertyLink Takeover Target Statement
On 12 November 2018, Propertylink entered into a Bid Implementation Agreement with ESR Real Estate (Australia) Pty Ltd (ESR) in relation to the proposal by ESR to acquire all the Propertylink Securities it does not already own for cash consideration of $1.20 per Propertylink Security by way of an off-market takeover offer (the Offer).
This week Propertylink issued a Target Statement setting out the proposal in full, along with supporting materials. Propertylink Directors unanimously recommend that acceptance of the Offer, in the absence of a superior proposal.
The Directors are of the opinion:
the Offer Price represents a significant premium to the trading price of Propertylink Securities prior to the announcement of the Initial Offer and 30 June 2018 NTA. The Offer Price reflects a premium of:
14.3% to the closing price of Propertylink Securities on 20 September 2018 of $1.05, being the day prior to the announcement of the Initial Offer;
15.2% to the 6 month VWAP of Propertylink Securities to 20 September 2018 of $1.042;
15.4% to Propertylink’s NTA per Propertylink Security as at 30 June 2018 of $1.04;
11.7% to Propertylink’s pro forma 30 June 2018 NTA of $1.07 per Propertylink Security; and
1.3% to the closing price of Propertylink Securities on 16 November 2018 of $1.185.
the Independent Expert, KPMG Corporate Finance, has concluded that in the absence of a superior proposal, the Offer by ESR is fair and reasonable to Non-Associated Securityholders;
the Offer provides certainty of value for your Propertylink Securities through 100% cash consideration;
no superior proposal has emerged;
the Propertylink Security price may fall if the Offer lapses and no superior proposal merges; and
if ESR acquires a controlling interest and the offer is not accepted, there are a number of risks that would be associated with being a minority Propertylink Securityholder.
The Offer is subject to a number of conditions, including ESR acquiring a relevant interest in at least 50.1% of all Propertylink Securities (on a fully diluted basis) and other conditions as outlined in the Bidder’s Statement.
See Target Statement
The Target Statement includes KPMG's assessment of Propertylink and a detailed description of the business. Propertylink is a triple stapled entity comprising Propertylink Holdings (PHL), Propertylink Industrial Partnership (PAIP), and PropertyLink Trust (PT) and their controlled entities. Australian
The business groups were stapled following the completion of the Propertylink IPO in August 2016.
Responsibilities within the Propertylink have been delegated as following:
PHL: provides the funds management services of Propertylink and holds a development asset (14-16 Orion Road, Lane Cove, NSW)
PAIP: owns and manages the property portfolio of Propertylink
PT: holds Propertylink’s co-investment stakes.
Propertylink manages over $1.0Bn in external FUM including;
Propertylink Australian Industrial Partnership II (PAIP II): PAIP II was created in 2015 and is an industrial fund, focussed on Australia’s east coast. Its investors are Townsend Group and the Norinchukin Bank, with a co-investment of 17.1% from Propertylink. The fund owns 14 assets in Sydney, Melbourne, Brisbane and South Australia, with a total AUM of $325 million as at 30 September 2018
Propertylink Commercial Industrial Investments (PCII): PCII was created in 2015 and is an industrial fund, focussed on Australia’s east coast. Its investor is the Saudi Economic and Development Company (SEDCO), which is a leading sharia compliant organisation responsible for a spectrum of operating companies, real estate investments, and public and private investments globally. Propertylink has a coinvestment of 7.5%. The fund only owns one asset, located in Queensland, with a total AUM of $33 million as at 30 September 2018
POP III Investment Partnership (POP III): POP III was created in 2016 and is an office asset fund, focussed on Australia’s east coast. Its main investor is Grosvenor Group, which is a privately owned internationally diversified property group. Propertylink has a co-investment of 11.2%. The fund owns three assets, located in Sydney, with a total AUM of $126 million as at 30 September 2018
Propertylink Australian Commercial Trust I (PACT I): PACT I was created in December 2017 is targeting value-add office investments in Sydney, Melbourne and Brisbane, with a total target assets of $500 million. Its investor is Partners Group. Propertylink has a co-investment of 15.0%. The fund owns only one asset, located in Sydney, with a total AUM of $195 million as at 30 September 2018.
Propertylink Enhanced Partnership (PEP): PEP was created in 2016 and is a diversified fund (industrial, commercial and retail) with assets across Australia. Its investor is Goldman Sachs. Propertylink has a coinvestment of 25.0%. The fund owns nine assets, located in Sydney, Melbourne, Brisbane and Perth with a total AUM of $349 million as at 30 September 2018.
Propertylink Australian Logistics Trust II (PALT II): Propertylink entered into an agreement with the alternative investment and asset management platform, China Merchants Capital, for the establishment of a new investment management vehicle, the Propertylink Australian Logistics Trust II (PALT II). Under PALT II, Propertylink will leverage the key strategic themes of urbanisation, last mile logistics, ageing population and technology to build a high-quality portfolio of logistics properties. The portfolio will focus on urban infill locations on the east coast of Australia, in particular Sydney and Melbourne, targeting total assets under management of $350 million. No assets have been acquired for this trust.